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The weekly newspaper for air cargo professionals Volume: 20

Issue: 41

16 October 2017

Azerbaijan looking to become logistics powerhouse

viation decision-makers in Azerbaijan backed by the Government and president Ilham Aliyev seem set on developing Baku into the logistics and air cargo centre of Central Asia. Delegates at the 7th Caspian Air Cargo Summit in Baku from 9-11 October heard of the country’s plans and how the region has been growing above the worldwide average. Speaking at the event was Azerbaijan Airlines president, Jahangir Askerov who said the aim is to make Azerbaijan airports into “logistics hubs”, adding a 2020 roadmap is ready. The conference also heard that in the first eight months of 2017, Baku Heydar Aliyev International Airport handled 202,000

tonnes, significant growth over 2016 when 170,000 tonnes were handled in the period. Cargo growth at Baku was once driven by the O&G market, but is now fuelled by rising volumes of special products like pharmaceuticals, perishables, electronics, mail, high-tech cargo and e-commerce shipments, while charter cargo flights have also grown strongly. Delegates also heard from Silk Way Group senior vice president, Wolfgang Meier who spoke in the session on e-commerce and detailed the home carrier’s ambitious plans to grow its own fleet and network. He told delegates the Silk Way Boeing 747 Freighter fleet is currently 12, but by 2019 it will increase to 15, as rising e-commerce demand and growth in special products means more main deck capacity is needed. The carrier now flies to 39 destinations but will add a further two by the end of this year

and in 2019 it will be operating to 50. Meier said Silk Way wants to make its network more “dense and robust” and the objective is to build up Baku into an intercontinental hub. Meier forecasted that 2018 would be more difficult for the air cargo industry than the wave it is riding in 2017 and there will be a better match of supply and demand, with overall market conditions much tougher. Summit delegates also heard from WorldACD Market Data director, Ken de Witt Hamer who said the Central Asia market which makes up 12 countries including Azerbaijan, has been growing faster than the global average. He said outbound traffic from 2015-17 in Central Asia is up 11 per cent, and inbound traffic is up 14 per cent in the period, compared with worldwide growth of six per cent. Interestingly, he also said the 20 top global freight forwarders only account for 14 per cent of the Central Asian market, much lower than the global average of 43 per cent. And general sales agents play a more important role in the region and year-to-date figures to August show they accounted for 35 per cent of sales, compared with 23 per cent worldwide.

Airfreight volumes at European airports continue to fly high with 10.9 per cent year-on-year growth in August, Airports Council International (ACI) Europe says. European Union (EU) airports reported growth of 10.2 per cent in August with non-EU rising at a faster rate, up 14.9 per cent. The EU’s top five airfreight hubs reported strong growth, with Frankfurt Airport (pictured above) rowing 5.6 per cent to 171,761

tonnes, Paris Charles de Gaulle Airport retaining second position with 5.8 per cent growth to 163,000 tonnes. Amsterdam Airport Schiphol was third busiest growth of 7.6 per cent to 146,666 tonnes, followed by Heathrow Airport expanding 13.1 per cent to 139,023 tonnes, and Luxembourg Airport rounding out the top five, with a 13.1 per cent increase to 75,438 tonnes. Istanbul Ataturk Airport was the busiest non-EU hub, with 13 per cent growth to 92,451 tonnes. On a year-to-date basis, freight across Europe increased 9.2 per cent, with EU airports growing 8.2 per cent and 15.7 per cent at non-EU destinations. Between January and August, Frankfurt volumes were up 5.6 per cent to 1.39 million tonnes, Charles de Gaulle by 2.9 per cent to 1.29 million tonnes, Schiphol by 8.3 per cent to 1.16 million tonnes and Heathrow by 10.3 per cent to 1.10 million tonnes.

Lufthansa and the Vereinigung Cockpit (VC) pilot union have signed a collective labour agreement (CLA) covering issues including pensions and payments until at least June 2022. The parties have agreed on a framework collective agreement and a new remuneration agreement as well as agreements on pension and transitional payments. They have reached a long-term collective bargaining agreement and correspondingly long-term stable labour relations. The new contracts will result in a structural overall cost saving of 15 per cent of staff costs in the cockpit before wage increases to be paid in the future. Lufthansa chief officer for corporate human resources and legal affairs, Dr Bettina Volkens says: “We are jointly creating a sustainable collective bargaining peace until 2022. This compromise opens up career prospects for our pilots and makes an important contribution to the competitiveness of our company.”

Volumes in Europe keep on surging Pilot deal signed

MALAYSIA GETTING SERIOUS ABOUT LOGISTICS STEPS TAKEN TO AUDIT SHIPPING OSLO IN A STRONG POSITION WITH 32% GROWTH NETWORK EXPANSION HELPS ARLANDA RISE

IATA and WCO integrate systems THE International Air Transport Association (IATA) Cargo-XML messaging standard has been fully integrated into the World Customs Organization (WCO) Cargo Targeting System (CTS) risk assessment tool. The integration enables electronic communication between airlines and customs authorities using the IATA Cargo-XML standards format. It will make communication simpler and more effective, and facilitate more accurate risk assessments by customs authorities using the WCO CTS application to capture advance electronic cargo manifest information. IATA director general and chief executive officer, Alexandre de Juniac says: “Simplifying processes, enhancing efficiency; and maximising safety and security are in everybody’s interest–shippers, border authorities and airlines. Collaboration is critical. And the integration of Cargo-XML into WCO CTS is the latest example of the positive results that can be achieved.” WCO secretary general, Kunio Mikuriya adds: “Integrating Cargo-XML into the WCO CTS will allow customs authorities using this tool to easily access detailed information about shipments, profile these shipments and identify those presenting a high-risk.”

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NEWSWEEK

22nd freighter for Qatar Airways Cargo

atar Airways Cargo has expanded its freighter fleet to 22 after welcoming its 13th Boeing 777 Freighter and its first Boeing 747-8F. The world’s third largest cargo carrier received them at its Hamad International Airport home base. The fleet now includes eight Airbus A330Fs, 13 Boeing 777Fs and one Boeing 747-8F. Chief officer of cargo, Ulrich Ogiermann says: “We are excited to take delivery of the newest freighter just days after our first Boeing 747-8F nose loader freighter joined the fleet, and at a time when we are increasing our capacity and frequencies as part of our network expansion strategy. “The new freighters will be deployed on long-haul routes in scheduled services and will further boost QR Charter services, allowing us to provide bespoke air charter services for various industries, including the industrial and oil and gas sectors.” Qatar Airways Cargo operates 13 Boeing 777F on long-haul freighter routes to the Americas, Europe, Asia Pacific and select destinations in Africa. The 777F has a payload capacity of more than 100 tonnes, and the aircraft is capable of flying 9,070 kilometres.

The carrier recently announced the commencement of 777F services to Pittsburgh, its seventh freighter destination in 2017 and 13th in the Americas, which started on 11 October. At the end of last month, Qatar Airways Group chief executive Akbar Al Baker said the carrier is likely to order more freighters as it continues to grow its fleet and network. Earlier this month the fast expanding Qatari carrier also added Helsinki to its pharma network and it continues to add more belly routes, with the latest being St Petersburg in Russia which was launched last week and will start on 19 December.

New container hits market

ZODIAC AirCargo Equipment launched its first Herculight S main deck containers during Inter Airport Europe Expo last week in Munich, Germany. After the successful introduction of the lower deck Herculight S container and pallet range, the firm has expanded its product range with cargo containers for the upper deck of cargo freighters and combi aircraft. The main deck containers are lightweight and durable, ensuring the lowest total cost of ownership. Additional benefits are convenience in operational handling and customisability. An innovative, patent pending door closure mechanism of the Herculight S main deck container was designed for easier and quicker door operation to optimise the container’s turn-around-time while ensuring proper door sealing. “We are proud to reveal our first main deck containers, responding to the market request to provide our Herculight range also in main deck configuration,” says Zodiac sales director, Jasper van Gelder.

NAP partners up with HAE AIR cargo network Neutral Air Partner (NAP) has appointed the HAE Group as a strategic partner. Neutral Air Partner chief executive officer, Christos Spyrou says members and clients will now have access to a wide variety of “innovative” air cargo products and services. These he adds include GSSA and interline solutions with leading carriers, neutral airfreight wholesale, space brokerage, charter and time critical services, as well as training for the air cargo and aviation industry through TSA. HAE Group vice president, Peter Kerins adds: “NAP is strategically a great fit for the HAE Group. Finding like-minded companies with the same goals and specialist skills across our divisions has been a challenge, but with our involvement in NAP, we now have identified many partners to work with. Unlike other networks, NAP is focused on highly skilled and professional companies with whom HAE Group have many synergies, so for our diverse business, it is the ideal platform, particularly when it comes to our signature GSSA and Solutions business offerings.”

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NEWS WEEK Cargolux and Emirates sign codeshare partnership

WORLDNEWS

argolux Airlines International and Emirates SkyCargo are to enter into a codeshare partnership, using cargo capacity on each other’s flights and offering services under their own air waybills and flight numbers. Earlier this year the two airlines announced the start of a strategic operational partnership working closely in a number of areas including block space and interline agreements, aircraft charter, hub connectivity between Dubai and Luxembourg and cargo handling cooperation. The partnership has resulted in Emirates SkyCargo starting weekly freighter services to Luxembourg in June 2017 and Cargolux transferring handling for their freighter flights at Dubai World Central to Emirates SkyCargo in September 2017. Emirates divisional senior vice president for cargo, Nabil Sultan says: “Over the last five months our operational partnership with Cargolux has gone from strength to strength. We have achieved a number of the milestones that we had targeted at the outset.” “We will now be able to deepen this partnership through our codeshare agreement and offer a more seamless and broader range

KENYAN cargo and ground handler Siginon Aviation has appointed former regional director for cargo sales at Martinair Cargo in South Africa, Maarten Klinjstra as general manager. He will oversee the general management of all Siginon Aviation operations at Nairobi’s Jomo Kenyatta International Airport and Eldoret International Airport.

of product and service offerings to our customers.” Cargolux president and chief executive officer, Richard Forson says: “This codeshare partnership is a natural progression in our cooperation and demonstrates the complementarity of both airlines. Our customers greatly benefit from this partnership as we can offer high-quality products and services to more destinations than ever before.” The codeshare agreement will cover cargo capacity on both passenger and freighter flights.

SAUDIA Cargo has signed an agreement to use RKN and RAP Opticooler containers from DoKaSch Temperature Solutions, and the airline has signed a master agreement with the ULD provider. The Opticooler is specially designed for extreme weather conditions, keeping cargo within temperature ranges of 2 to 8C or 15 to 25C even in temperatures of up to 50C, which is common in Saudi Arabia.

ABC expands in Europe with Liege flights

AIRBRIDGECARGO Airlines (ABC) is to add Liege Airport to its network with flights starting in the winter schedule, operating up to 12 flights a week. It describes the Belgian airport as “an excellent example of a cargo-friendly airport in every aspect of its daily operations” giving carriers speed, flexibility, ground and airport infrastructure on a price-wise basis. Liege is situated at the heart of the Paris – Amsterdam – Frankfurt golden triangle, and the city attracts freight volumes ‘like a magnet’, gathering general cargo as well as special shipments.

ABC general director, Sergey Lazarev says the airline has a long history of cooperation with Liege Airport via Atran Airlines, saying: “With significant improvement of our inland options and building of mutually-beneficial collaboration with our trucking partners, we are optimistic about ABC’s future in Liege and the benefits it will bring to our customers.” Liege Airport chief executive officer, Luc Partoune says it has an advantageous geographical location, technical equipment and motorway accessibility, making it an ideal cargo point. He says: “Our Liege air cargo community embraces supply chain stakeholders – carriers, handling providers, trucking companies, etc – and offers a pool of experience for all the parties involved. We foresee ABC growth and are ready to contribute to its smooth operations.”

WCA to take majority interest in EGLN THE World Cargo Alliance (WCA) has reached a formal agreement to acquire a majority interest in the rapidly growing Elite Global Logistics Network (EGLN). EGLN, which was founded in 2015, has seen its membership around the world flourish to 332 members in 131 countries. The acquisition by WCA will enable the network to move to the next stage of its development and provide member companies with increased opportunities for business expansion and organic growth. Roy Stapleton will remain EGLN president and continue to set the network’s

strategy as well as overseeing day-to-day operations. He says: “The suite of benefits evolved by WCA has allowed it to stand out as a networking leader, and EGLN members will benefit from these obvious synergies offered by this unique partnership.” WCA chairman and founder, David Yokeum says: “EGLN will retain its unique ethos and management style, but by adding many of WCA’s valued benefits and attributes, alongside strong backroom and financial support, EGLN has the tools to embark on an exciting new phase in its development.”

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ACW 16 OCTOBER 2017

NEWSWEEK Hijacked Lufthansa 737 returns home

olga-Dnepr Airlines has transported the ‘Landshut’ Lufthansa Boeing 737-200 which was hijacked by terrorists in 1977 back home to Germany. The aircraft, named after the Bavarian town of Landshut, was hijacked on 13 October 1977 en route from Palma, Majorca, to Frankfurt. It was forced to fly to Rome, Cyprus, Bahrain, Dubai and Aden before reaching Mogadishu. A daring raid by German special forces ended the four day ordeal and 86 hostages were successfully freed but the pilot, Jurgen Schumann had already lost his life at the hands of the four terrorists before he could be rescued. The 737-200 later returned to service and was sold, ultimately flying for Brazilian airline TAF Linhas, before being decommissioned in 2008, and since then it has been abandoned at

Fortaleza Airport. The German foreign ministry purchased the aircraft in order to bring it home, describing it as a living symbol of free society. It will be fully restored and placed on permanent display in the Dornier Museum in Friedrichshafen. A large crowd of officials, former crew members, international media and aviation enthusiasts were on hand to see the AN-124100 transport the fuselage and wings, and an IL-76TD-90VD carrying the engines and other components to the local airport in Friedrichshafen. Volga-Dnepr Airlines general director, Mikhail Smirnykh says: “We are extremely proud to have been chosen to bring the Boeing 737 ‘Landshut’ home to Germany. It is a symbol of the nation’s commitment to never bow down to terrorism. Bringing this Boeing home is very meaningful to us as we share and support everything it stands for.”

Oman signs ULD deal

OMAN Air Cargo has signed a five year unit load device (ULD) outsourcing contract with Jettainer. The airline will utilise lightweight ULDs constructed from carbon fibre as well as partly recycled composite materials, which Jettainer says will result in reducing CO2 emissions, improve payload and increase fuel efficiency. Jettainer’s management solutions will reduce Oman Air’s existing container fleet by about 20 per cent to 1,200 units. Oman Air’s ULD fleet includes 600 aluminium AKE containers, and these will be replaced by lightweight AKEs, and another 200 lightweight containers will be added to the fleet as part of its expansion in the near future. Oman Air senior vice president commercial cargo, Mohammed Al Musafir says: “Our agreement with Jettainer comes at a time of excellent growth and modernisation of the cargo division, as we continue forward with our aggressive growth plan. We are confident Jettainer is a partner that shares our positive outlook and offers us the right services and technology to further improve our offerings.”

Aviastar chooses Hactl

AVIASTAR has appointed Hong Kong Air Cargo Terminals (Hactl) to handle its new freighter services to Hong Kong. The Moscow-based carrier has started operations from Novosibirsk’s Tolmachevo Airport utilising a Tupolev Tu204C with a 28.5 tonne payload and 14 pallet positions. It plans to increase services to four times a week by the end of 2017 by adding an extra frequency from Tolmachevo and twice weekly flights from Vladivostok, all operated for Russian Post. Hactl is providing a full ramp and terminal handling service for Aviastar, along with all documentation. Aviastar chief executive officer, Dmitri Kovalenko says: “We are confident that Hactl’s considerable experience in mail handling, and their dedicated Express facilities, will enable us to provide our customer with the highest possible service standards.”

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NEWS WEEK FIATA: Malaysia getting serious about logistics as it invests in infrastructure

alaysia is betting big on e-commerce as a key driver of economic growth, as the country puts its ‘money where its mouth is’ in supporting widespread logistics and e-commerce development in the country, reports Donald Urquhart from Kuala Lumpur. From road and rail to sea and airports, IT services and free trade zones, logistics and related infrastructure is seeing widespread investment by the Malaysian government alongside alongside key initiatives to streamline processes and regulations, as part of its commitment to trade facilitation. “We will ensure Malaysia is the preferred logistics gateway in the Association of Southeast Asian Nations (Asean) region,” says Malaysian Transport Minister, Liow Tiong Lai (pictured), speaking at the opening of the 56th FIATA World

Congress 2017 in Kuala Lumpur last week. The investments run the gamut from e-commerce facilities at Kuala Lumpur International Airport (KLIA), a new container terminal at Port Klang, to massive rail projects across the country including connections north to Thailand and a High Speed Rail connection between Kuala Lumpur and Singapore. Noting the global digital economy is growing at a rate of nearly triple that of the overall global economic growth, Lai said that e-commerce in Malaysia is expected to grow to MYR 114 billion ($27 billion) by 2020, or 6.4 per cent of GDP with the implementation of the country’s National e-Commerce Strategic Roadmap. As part of this roadmap the country has taken the innovative step of creating what the Transport Minister says is the first of its kind, the Digital Free Trade Zone (DFTZ) located at KLIA. “Despite being on track to reinvigorate the logistics industry, we are also equally aware of the need to ensure the sustainability of the sector,” Lai says.

Disruptive change

“With the economy projected to grow progressively, we require a disruptive change within the industry to continue to support the nation’s growth and achieve the key results laid down in the masterplan. “The first of its kind, the Digital Free Trade Zone (DFTZ), will create this much-needed disruptive innovation for the logistics ecosystem,” he adds, saying it will combine both physical and virtual zones. Aimed at facilitating e-commerce logistics,

the DFTZ is a special trade zone designed to promote the growth of e-commerce and capitalise on the exponential growth of the Internet economy to make Malaysia the regional fulfilment hub for ASEAN regional consumers. It will serve to facilitate seamless cross-border trade and enable local businesses, especially SMEs, to export their goods easily with the help of leading fulfilment service providers. The MYR 500 million e-fulfilment hub is being jointly established on a 60 acre plot of land, formerly occupied by the old low cost carrier terminal, by Cainio Network, Alibaba’s logistics arm and Malaysia Airports. The Alibaba Group along with e-commerce platform Lazada, will use the hub to serve its e-commerce B2C and B2B operations for Southeast Asia and beyond.

Efficient cargo clearance

The e-fulfilment hub will form one part of a series of components which include a 46,450 square metres Satellite Services Hub within the new Kuala Lumpur Internet City; and a virtual zone which will host the E-Services Platform. The e-fullfillment hub is next and is expected to be completed within a year. As part of Malaysia’s commitment to Alibaba, some 1,500 SMEs (of the total 99,000 SMEs in Malaysia) are to be brought onboard by year-end. Efficient cargo clearance is part of this bigger equation and the Malaysian government has committed to bring Customs clearance at the KLIA Aeropolis down from nearly four hours currently, to just 90 minutes by next year, according to Malaysia Airports Holdings man-

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aging director Mohd Badlisham bin Ghazali, who was also speaking at the FIATA congress. “That’s a vast improvement here in Malaysia in terms of efficiency,” he adds. The glue sticking all this together comes in the form of the new KLIA Aeropolis, which began operations on 1 October. The ‘big four’ major integrators and 20 of the world’s top-25 freight forwarders have begun operations at the facility according to Badlisham.

Gateway to SE Asia

“It will be our gateway for Southeast Asia with connectivity of over 1,250 weekly flights within Southeast Asia. There are also on-going efforts to enhance KLIA Aeropolis as an integrated air cargo network via a mix of air, sea and land facilities, to position it as the main distribution gateway within the ASEAN region,” the Transport Minister says. With the KLIA Aeropolis, the airport is focused on increasing its cargo and logistics traffic, targeting to increase cargo volume by 2.5 million to three million tonnes by 2050 from the current 726,000 tonnes. Much of this will be fueled by e-commerce traffic and Malaysia’s ambitions as a regional distribution hub. Once completed, it is expected that the e-fulfillment will enable shipments to be delivered within 72 hours to all ASEAN countries, Lai highlights. When the DFTZ is fully completed by 2025, the e-fulfilment hub is anticipated to handle and move up to MYR 280.8 billion worth of goods around the ASEAN region.

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DANGEROUS GOODS

Industry concerns remain high on lithium batteries

ithium batteries and their safety continue to dominate the dangerous goods (DGR) agenda in the airfreight industry. Cargoes of lithium batteries were implicated in fires which destroyed a UPS aircraft in Philadelphia in 2006, that caused UPS Flight 6 to fatally crash in Dubai in 2010 and the loss of Asiana Airlines Flight 991 near South Korea in 2011. As the US Federal Aviation Administration determined in 2015 “the uncontrollability of lithium battery fires can ultimately negate the capability of current aircraft cargo fire suppression systems and can lead to a catastrophic failure of the airframe”. Currently standalone lithium-ion batteries and lithium metal batteries are banned as cargo from passenger aircraft. For transportation on freighters there are a long list of regulations regarding classification of lithium batteries and their packaging and labelling. The batteries must also be charged to no more than 30 per cent to reduce the fire risk.

Regulation enforcement

“Lithium batteries are the top item in our areas of concern and that dates back to those three aircraft incidents,” says the International Air Transport Association’s (IATA) assistant director for cargo safety & standards, Dave Brennan. “The behaviour of these batteries when involved in a fire and their movement in an aircraft are of

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real concern. Our members are particularly worried about proper enforcement of current regulations. Where shippers are following the correct testing, labelling and packaging instructions we don’t see a problem but, some through ignorance and others through more malicious intent, are not doing this properly and failing to disclose lithium batteries in their cargo. “They label that their package contains mobile accessories with no batteries but in reality it is full of batteries. They do this because they think they will save money.” Brennan says this is a growing problem particularly with the continued boom in e-commerce. “Often the sellers, who are working out of their home, have no idea that either DGR regulations exist or that the product they are shipping comes under that category because of the involvement of lithium batteries,” he explains. “We would like the providers such as eBay to

take some more re s p o n s i b i l i t y and educate their sellers better.” B r e n n a n also calls on Government regulators to properly enforce the regulations. “We expect them to go after these shippers. We expect them to jump on them with both feet but they spend too much time at airports looking at the airlines. “They already have a good understanding, regulators instead need to look upstream in the supply chain,” he states. “Part of the challenge they face is cross-border movements. For example, if a Chinese shipper wants to move their cargo through Hong Kong, and it goes by road or sea and there is an issue with it then who has the regulatory authority? There is a jurisdictional gap which needs to be fixed. Governments also need to see this holistically, not just as an air transport issue,” he adds. KLM Cargo director for operational integrity, compliance & safety, Kester Meijer, agrees there is an extra onus on shippers to fully understand the risks and hazards of DGR transportation. “These types of batteries are in many products ordered online around the world and demand is

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rising from electronics to automotive,” he says. “DGR is a difficult animal. In the past many of these shippers, such as electronic manufacturers, did not come under dangerous goods but now, with lithium batteries inside or alongside their product, they do. “Do these producers and shippers have the basic knowledge around DGR to ensure safe movements? Do they understand or want to do the extra checks that are needed?”

Certification scheme

Meijer fears not and says a certification scheme to validate and audit shippers who are transporting lithium batteries through the air may be necessary. He believes this would make the movement of DGR safer and more efficient throughout the supply chain. “At present the first moment when the dangerous goods regulations come into force in the supply chain is with freight forwarders,” he says. “It needs to be earlier in the process with the shippers. It also needs to cover mail postal operators where dangerous goods could be present in a mail bag. “Yes, they have to follow regulations from ICAO, the International Civil Aviation Authorities and IATA, but to what extent have they trained their own people in these rules? “The volumes of e-commerce parcels are so great with a number of small packages that it makes the process very difficult.” (Continued on Page 7)

DANGEROUS GOODS Steps taken to audit shipping and develop packaging standards

he call for a lithium battery certfication scheme is one that much of the industry would echo. International Air Transport Association (IATA) assistant director for cargo safety & standards, Dave Brennan (pictured below) highlights work of the Medical Devices Battery Transport Council, which is working with the UPS Pilots Association to create a ‘Safe 2 Fly’ system that would require voluntary certification and independent auditing of shippers moving lithium batteries. It is aiming for a 2018 launch. “It will need to add value to the shipper such as being offered preferential treatment because if it is just an additional cost then I don’t see it succeeding. “The International Civil Aviation Organization (ICAO) through SAE Aerospace, is also aiming to develop new packaging standards for lithium batteries to ensure any issue with fire is kept inside rather than escape and threaten the aircraft,” Brennan believes. Brennan adds: “We could see a standard in the middle of next year which could lead to the ICAO looking at whether we could return lithium batteries as cargo back on to passenger aircraft.” KLM Cargo director for operational integrity, compliance & safety, Kester Meijer feels

the sheer complexity of the lithium battery regulations is another contentious issue. “We need to simplify the regulations and the technical instructions within them. Even the experts are at a loss sometimes to understand them,” he claims. KLM Cargo safety manager, Ed Boon says a United Nations Working Group is presently looking at how to simplify the process of transporting lithium batteries. He adds: “If you have a battery it is sometimes difficult to work out what category it falls into,” Boon says.

Pharma impact

“Also, there needs to be more clarification of what products come under the regulations. Take the pharmaceutical sector for example. They increasingly want to send tracker devices with their products. But these devices hold a lithium battery. Many don’t understand the categorisations. Simplification is overdue,” he adds. Complexity and need for intensive checks and completion of internal processes can lead to airlines saying ‘No’ to shipments, Meijer says. “Some of these batteries are getting so large that you need to go through a lengthy process to get approvals from within the airlines,” he says. “Some departments don’t want to move lithium because it is considered dangerous.” Peter East Associates managing director of dangerous goods, Nicholas Mohr feels packaging instructions for lithium batteries run for pages

and pages and they keep changing. He adds: “It is a lot for shippers to get to grips with. Those shippers who want to comply have a steep learning curve. Airlines want to restrict, restrict and restrict and are imposing their own guidelines. We should not be where we are in a sector where the demand is increasing.” The further digitalisation of the freight process and the phasing out of manual paperwork, will Meijer says, also help with improved information sharing and checks.

Training drive

KLM is also looking at improving dangerous goods (DGR) training by making it more competence based. “Ramp handlers have to do DGR training but how much of these complex regulations do they remember?” Meijer says. “Their only focus should be on recognising DGR labels and if something goes wrong such as a fire or a leak what they need to do next. The training needs to be more targeted.” Boon adds: “They should not be put through hours and hours of training if all they need to do is recognise labels. We are talking to national regulators on how we can make these changes but still ensure safety and efficiency.” Mohr adds: “We have a lack of dangerous experts amongst shippers and airlines. The main men in the postal operators and airlines know the regulations, but that doesn’t get filtered down to the staff.” Brennan rejects assertions that lithium

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battery regulations are too complex: “If you want to ship dangerous goods then you need to understand the regulations and do the training. It is a serious issue so it should be taken seriously. Saying it is too complex is not an excuse.” Action is being taken and in September Kuehne + Nagel launched BatteryChain, an integrated supply chain solution addressing increasing demand for lithium batteries. The multi-modal initiative spans from the manufacturer to the assembly line to warehousing and is available for automotive, high-tech and industrial customers, whenever lithium battery logistics is required. Emirates SkyCargo flies DGR such as lithium batteries contained in and packed with consumer electronics, radioactive medical isotopes, internal combustion engines and dry ice used as a refrigerant for perishables. Emirates SkyCargo’s manager for cargo standards and operational safety, Trevor Howard. says as it now moves more temperature-sensitive pharma, shipments often have data loggers equipped with lithium batteries, making them regulated by certain parts of DGR regulations. “It is important the reality of accepting, handling and transporting DGR is understood when regulations are discussed, developed or updated,” says Howard. “We are working with industry to support the automation of dangerous goods acceptance, and removal of paper from shipper’s declaration for DGR.”

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SCANDINAVIA

Oslo in a strong position with 32% growth

irfreight volumes at Oslo Airport have grown 32 per cent in the first half of 2017, and director of cargo at airport operator Avinor, Martin Langaas (pictured right) says there is much to be positive about. Oslo has welcomed new freighter services from Emirates SkyCargo, AirBridgeCargo Airlines, Cargolux Airlines International, Turkish Cargo, CAL, DHL and Atlas Air, with a major focus on transporting seafood exports. Avinor is predicting that Oslo Airport will handle 90,000 tonnes of seafood in 2017, which would be an increase of 50 per cent compared to 2016. Langaas says: “It has been a very good year. We have gone from two freighter airlines to nine, and eight departures to 18. This year has

seen growth of 32 per cent. We are one of the largest airfreight markets in Europe for seafood with more than 600 tonnes a day going out of Norway in air cargo.” Langaas is expecting more airlines this year and better relations with China will also help. In 2010 China and Norway cut off bilateral relations due to the Norwegian Nobel Committee awarding the Nobel Peace Prize to human rights activist, Liu Xiaobo, who was in prison for “inciting subversion of state power”. Salmon exports to plummeted to the point that the Faroe Islands were exporting more to China than Norway. Sino-Norwegian relations were resumed in December 2016 and the two nations held their ninth round of negotiations for a Free Trade Agreement from 21-23 August 2017.

Oslo is looking at expanding facilities to keep up with demand, with construction of a large seafood centre due to commence in 2019 and be completed in 2020, a new area for integrators and more parking for freighter aircraft.

An attractive location

The airport also has attractive incentives for freighters including a 100 per cent discount of landing fees in the first year, with the discount reducing each year. Langaas says Norway represents about half of the air cargo in the Nordic markets, and Norwegian seafood is very important to neighbouring countries. Langaas hopes it does not sound too cocky to say: “They depend on us and we don’t depend on them.” Norway is a very wealthy country; according to International Monetary Fund figures for 2016, Norway had the sixth highest GDP per capita at purchasing power parity rates in the world at $69,249. By comparison Sweden is 15th at $49,836 and Denmark is 21st at $47,985. This means Norway has a large consumer market, which is another area with the potential to grow. Though there is much to be positive about,

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there are still challenges. Norway is a single commodity export market, mainly consisting of seafood.

More opportunities to grow

Langaas comments: “On the new freighters in and out of Scandinavia almost half the freight is seafood, that puts pressure on rates and trying to get the right combination.” There is also an imbalance of 80 per cent exports and 20 per cent imports so trying to get an even balance is very hard. Only about 30 per cent of air cargo seafood exports goes by air from Oslo, with the rest travelling by road to other airports in Nordic countries and further afield, so this is also a market for freighters to take advantage of. Langaas says: “Over 60 per cent is still not flown from Norway, there is huge potential for intercontinental passenger services.” Langaas believes the outlook is very good for air cargo in Norway. He says: “The Norwegian government believes the market will double to 1,200 tonnes of seafood a day out of Norway by 2024 and 500 per cent growth is expected in the next 30 years. Airfreight will have significant growth in the years to come.”

SCANDINAVIA Network expansion helps Arlanda rise at double digit rates

argo volumes have increased 10.6 per cent in the first half of 2017 at Stockholm Arlanda Airport with intercontinental flights contributing to the growth, Swedavia cargo director, Ylva Arvidsson (pictured) tells Air Cargo Week. She says the cargo business is “doing great” and cargo capacity continues to expand with Singapore Airlines launching direct Stockholm – Singapore flights and Air India services to New Delhi. E-commerce imports from China are also increasing, growing 60 per cent in July. Arvidsson says: “We are also optimistic for the next year and hope for more intercontinental passenger flights. The air cargo market in Sweden is quick to support direct capacity.” Swedavia, the state owned company that operates 10 airports across Sweden, is working on expanding capacity across its airports, and there are substantial plans for Arlanda. Arvidsson says: “During the fall we will work together with our Real Estate department to plan for the future Cargo and Logistics Area. On the passenger side Stockholm Arlanda Airport is

also growing very fast and the current capacity increases may be followed by further expansion of the terminals in the years ahead.” Arlanda is the air cargo hub for Sweden, located where the bulk of Sweden’s export cargo originates. Arvidsson says there is a good balance between exports and imports, at 55/45, and a mix of commodities including machinery, spares, pharmaceuticals and salmon. The airport is also open 24 hours a day, 365 days a year. She says: “We have three cargo handling companies and most Swedish agent’s head offices are located here. We are perfectly located to serve Sweden, Norway, Finland and the Baltic countries as there are scheduled truck feeder services from a number of suppliers.” Arvidsson sees the shift to more sensitive cargo continuing to grow, with an increasing number of intercontinental services driving

demand for pharmaceuticals and perishables. She adds: “The increase of E-commerce will also grow and will increase the number of smaller shipments due to the buying pattern of the consumers.” Arvidsson is optimistic about the outlook for

Arlanda and Sweden, saying: “Our geographic location in Europe gives us both advantages and disadvantages: our shipper wants direct connections to the main export-destinations in the world. This will help us in attracting new airlines and destinations.”

Costs remains the focus at SAS SAS Cargo Group has had a good start to 2017, though cost reductions will continue to be the main area of focus, president and chief executive officer, Leif Rasmussen (pictured) says. He says the first half of 2017 has been good, followed by improved demand during the summer and early autumn. Tonnage is expected to increase reflecting the seasonal peak. Capacity is expected to increase in 2018 with only limited rises in demand. Rasmussen says: “While we believe cost reductions will continue to be a main focus area there is also a need to improve efficiency, productivity and quality which will require that the industry puts increased focus on digitalisation.” There is high demand for pharmaceutical products across Scandinavia, and SAS has undergone IATA CEIV Pharma certification, as well as upgrading facilities and training staff. Rasmussen says: “Going through the CEIV certification process means we now meet the highest standards demanded by the pharmaceutical industry. The pharma volumes have increased marginally until

now, however the investments and efforts have been very well received by the customers.” Undergoing IATA CEIV is not the end of the process, SAS is launching a new pharma product called SAS Pharma Cargo, which was developed to offer customers an ideal environment for handling temperature sensitive cargo across SAS’s entire supply chain in a safe and secure manner. It offers full transparency through active GPS monitors, and Rasmussen explains: “This active tracking device monitors the shipment; assuring accurate temperature control in order to safeguard correct handling through the entire transport chain. SAS Cargo has also partnered with providers of active temperature containers that offer efficient protection for temperaturesensitive shipments.” He believes the air cargo industry needs to develop to meet customer expectations, saying: “Today’s customer is used to dealing with many other industries where digitalisation is fully implemented. This puts further demand on our industry to join this process.” He adds: “In my opinion lack of coordinated innovation and focusing on automation and cost efficiencies is the biggest challenge within the industry. Joining the digitalisation process is at the same time our biggest opportunity.”

aircargoweek.com

ACW 16 OCTOBER 2017

EXPRESS CARGO Global footprint of DHL grows in Europe and the US

HL Express has opened new facilities in the first phase of Budapest Airport’s 50 billion Forint ($191 million) BUD:2020 Development Programme. The express company is the latest to launch at the warehouse and office complexes, which have automated sorting systems. It is the largest air cargo development at Budapest to date, with a development of just over 60,000 square metres. DHL Express Hungary managing director, Zoltán Bándli says: “The 6,000 m2 warehouse capacity will give DHL space to accommodate the volume growth of our business, with the new state-of-the-art sorting technology, which includes fully automatic shipment processing, allowing us to process more than 6,000 pieces per hour, which is three times our current capacity.” He also says having DHL Global Forwarding and DHL Freight located at will strengthen synergies between the business units and contribute to a more effective operation, further improving services and development of cross dock businesses. More than 600 employees will be based at the two new express complexes at Budapest.

The next freight phase of the BUD:2020 Development Programme will be the development of Cargo City next to Terminal 2, due to be completed in 2019. The new facilities will provide centralised cargo operations, and expand the Hungarian hub’s cargo handling capacity to 250,000 tonnes per year. Budapest Airport director of property and cargo, René Droese says: “We are pleased to kick start a new era for cargo at Budapest

Airport with the opening of our new express facilities.” Meanwhile, forwarding arm - DHL Global Forwarding has expanded in the US with the opening of a station in Salt Lake City to satisfy local customer demand for airfreight, ocean freight, customs brokerage, warehouse storage and domestic services. The capital of the state of Utah is home to thriving industries including technology, vitamin and supplements, diet-related products, probiotics, aerospace, logistics and outdoor activities and is considered a potential ‘Silicon Valley’ type location after major e-commerce companies have opened facilities in the city. The Salt Lake City station employs nine people and is located three miles from Salt Lake City International Airport. DHL Global Forwarding US chief executive officer, David Goldberg says: “As DHL continues positioning itself for growth in more and more U.S. cities, DHL customers will benefit from a more personalised service from experts who understand both the nuances of global and domestic trade and the ways to navigate the complexities to help customers save time and money.” DHL has a presence in 15 cities across the US and plans to have 36 US stations by the end of 2017.

Asia expansion for UPS

UPS and SF Holding – the parent company of SF Express – have announced the approval of their planned joint venture (JV) by China’s Ministry of Commerce (MOFCOM). The JV enables UPS and SF to collaborate on development and provision of international delivery services from, initially, China to the US and, in the future, to other trade lanes. The JV approval allows the two companies to leverage their complementary networks, service portfolios, technologies and logistics expertise. The alignment provides customers with greater coverage, additional routing options, increased capacity, and more choice in transit times and service options. UPS Asia president, Ross McCullough says: “UPS has an aggressive multi-year growth plan in China. Aligning our two networks will increase our market presence by connecting China’s consumers and manufacturers to the US and around the world with logistics solutions that strengthen cross-border B2B and B2C capabilities. This JV is highly symbolic of UPS’s confidence in long-term growth opportunities in China.” SF group vice president, Alan Wong adds: “The establishment of this joint venture boosts global expansion of Chinese enterprises beyond local borders. “SF and UPS are able to maximise the strengths of both companies to continuously innovate and create more competitive products that deliver strong value for customers.” UPS has also inaugurated a facility in India at Hyderabad to support local businesses and SMEs (small and medium enterprises) looking to expand trade with the global marketplace. The express firm will provide integrated services for small package, supply chain solutions and contract logistics for faster and more efficient access to international markets. UPS says SMEs are a vital engine for economic growth and contributors to India’s GDP. Micro, Small and Medium Enterprises (MSMEs) contribute around six per cent of the manufacturing GDP, 25 per cent of services, and 33 per cent of manufacturing. UPS president for Indian subcontinent, Middle East and Africa (ISMEA), Jean-Francois Condamine says: “The economic growth of around 7½ per cent puts India at the top of the fastest growing G20 economies. Hyderabad is fast becoming a ground for implementation of the ‘Make in India’ initiative.”

ACW 16 OCTOBER 2017

aircargoweek.com

ACW 16 OCTOBER 2017